U.S. equities closed Friday on a positive note after the latest monthly employment report delivered the balanced economic signal investors had been seeking—cool enough to ease inflation concerns yet robust enough to avoid sparking recession anxieties. Despite the upbeat finish, the three major indexes finished the week in negative territory. The Dow Jones Industrial Average retreated 1.26% for the week, and the S&P 500 dipped 0.3%, weighed down by persistently high oil prices and rising long-term bond yields. Only the Nasdaq managed a weekly gain of 0.45%, fueled primarily by sustained investor enthusiasm for artificial intelligence-related equities.
Nvidia reached a new all-time intraday high on Friday, marking its first daily record since May. The rally also lifted other tech heavyweights, with CrowdStrike, Palo Alto Networks, and AMD all touching fresh peaks.
Jobs Report Signals Potential Fed Pause
The September nonfarm payrolls figure came in at 29,000, significantly below the 84,000 consensus estimate, while the unemployment rate ticked up to 4.2% from 4.1%. This softness, combined with a cooler-than-expected August personal consumption expenditures (PCE) price index released earlier in the week, shifted market expectations regarding Federal Reserve policy. According to the CME FedWatch Tool, the probability of a rate hold in late October jumped to 78%, up from just 36% the previous week.
The improved sentiment helped reverse the week’s drag. The Dow gained 0.5% on Friday, the S&P 500 rose 0.7%, and the Nasdaq climbed 1.2%, briefly hitting an all-time high before settling slightly lower. Additionally, oil prices retreated on news that European nations are considering releasing strategic fuel reserves, further supporting equity markets as the conflict in Iran continues.
Micron Reports Surge in Revenue and Demand
Micron Technology reported a exceptional quarter on Wednesday, with revenue skyrocketing 379% year-over-year to $54.23 billion. Adjusted earnings per share reached $33.42, beating analyst expectations. Looking ahead, the company guided for $61.5 billion in revenue and $38.15 in adjusted EPS for the first quarter of fiscal 2027, both figures surpassing Wall Street forecasts.
Despite the strong results, Micron shares ended the week down 0.7%. Investors appeared concerned about the company’s plans to expand manufacturing capacity, fearing increased supply could eventually pressure memory chip prices. However, Micron management indicated that supply-demand conditions in 2027 and 2028 will likely be tighter than in 2026, with approximately 75% of expected 2027 output already allocated. The company also secured 26 strategic customer agreements, up from 16 the prior quarter.
Analysts remain optimistic, noting that CHIPS Act funding restrictions may ease in December, potentially allowing Micron to utilize its cash reserves for a significant stock buyback. Consequently, the price target was raised to $1,200 from $1,100, with a buy-equivalent rating reiterated.
Nvidia Authorizes Major Share Buyback
Nvidia strengthened its investment case by announcing an additional $150 billion in share repurchases, bringing its total remaining authorization to $235 billion. With an anticipated $440 billion in free cash flow over the next six quarters, the company has ample capital to return value to shareholders without compromising its AI infrastructure investments.
The buyback addresses a recent disconnect between Nvidia’s fundamental performance and its stock trajectory. While adjusted earnings per share have more than doubled over the last two quarters, shares have trailed peers in the iShares Semiconductor ETF, rising only about 24% year-to-date. On Friday, Nvidia shares surged 3.95% for the week, breaking through its previous May record high, though it did not close at a new intraday peak.
While the $150 billion authorization fell short of some analysts’ calls for a $500 billion program, it represents a substantial step toward leveraging the company’s massive cash generation for shareholder benefit.
That jobs report really was the key. A soft number helped cool rate fears just enough to let tech soar on Friday. Great balance.
I’m surprised Micron dipped despite those insane revenue numbers. Seems like supply fears are outweighing the earnings beat for some investors.